Oil prices continue to rise, and the polypropylene upward cycle has arrived

When the train of time slowly entered the lunar calendar in 2021, polypropylene with an average value of nearly 9,000 CNY/ton was sitting there, looking at it affectionately, the chicken feathers at 6,000 CNY/ton last year have gradually drifted away. The return of the bustling king of the polypropylene industry, guiding people who follow along the way to start from a new start.

After the Spring Festival returns, the domestic polypropylene futures prices have seen a resonant rise again: the main force of polypropylene hits a new contract high; from February 18 to 19, 2021, the price of polypropylene spot products in the East China market has increased by 500 CNY/ton. , Which was up 5.98% from the last trading day before the holiday and 8.54% from the end of January. In fact, the polypropylene price of 9,000 CNY/ton is not high in the long-term. It's just that the rise of so much in just two days is indeed beyond the expectations of the industry. What is the logic of the price increase of polypropylene? It is low inventory, high demand, capital favor, and emotional hype! ?

The accumulated inventory of major manufacturers is lower than in previous years, and the market circulation resources are not loose enough

Judging from the inventory accumulation of mainstream enterprises after the holiday, this year’s inventory has also experienced inertial accumulation, but the post-holiday inventory of 940,000 tons is far lower than the level of the same period in previous years, especially in the context of large-scale production of enterprises. It is light and windy, and it is a far cry from the inventory pressure of over 1 million tons last year.

In addition, due to the lack of clear judgment on the market after the Spring Festival before the holiday, some manufacturers and traders have increased their efforts to pre-sell resources after the holiday, which also made the market's current circulation resources not loose enough, and some wire drawing and fibers appeared to be demanding. In this context, it is inevitable for manufacturers to raise prices several times.

The wire drawing schedule is not low, but the market circulation is lagging

Judging from the production ratio of various manufacturers, the production ratio of 37.32% of wire drawing is indeed not low, but because manufacturers have oversold a lot a year ago (some have been pre-sold until the end of March), and the current production resources need at least 7 Days, this is under normal conditions of logistics and transportation.

In terms of the current state of market transportation recovery, time still needs to be extended. Therefore, the circulation resources of the market spot are not particularly loose. For example, the drawing resources in South China are out of stock. The price of foreign resources is already higher than the domestic market price because of the price of US$1,200/ton. Therefore, the import window is closed to protect domestic resources.

Peak demand for local Chinese New Year achievement, and enthusiasm to stock up after the holiday is widespread

From the perspective of downstream demand, in the words of practitioners, this year's demand is really great. BOPP basically does not stop, the raw materials during the Spring Festival are purely consumed, and there is definitely a demand for replenishment of raw materials after the holiday. Indeed, it is common for BOPP factories to purchase raw materials of 1,000-2,000 tons after the holiday. For the plastic weaving industry, research has already been done a year ago, and some of the work started earlier around the fourth day of the first month of the lunar calendar. The start of the year after the year is basically in line with the previous survey, and even the third year of the junior high. , Drive. The demand for fibers and transparent materials has continued to be stable and large because the global epidemic has not been completely eliminated.

For the market outlook, Zhuo Chuang Information's view is still optimistic. First of all, considering that domestic demand is still relatively strong, and manufacturers, traders, and terminal manufacturers have almost no inventory, so the demand can be sustained for a period of time.

Secondly, insufficient supply of polypropylene in some areas and hindered logistics and transportation have led to a mismatch between the purchase and sale of polypropylene and cutting-edge resources in the market;

Third, considering the needs of global epidemic prevention and control and the pressure of epidemic prevention in other foreign countries, it will lead to the possibility of some terminal orders continuing to return to China. At the same time, with the support of loose funds and continued high oil prices, the cycle of rising polypropylene market has arrived.